Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Sun, 04 Jun 2023 10:35:42 GMT by Caroline
Good morning, If I got a tax refund from Canada on 7 April 2022, do I have to declare this in my UK self assessment tax return this year? Last year, my UK accountant said that I didn't have to report any tax refund. However, since I'm filling out my self assessment by myself this year, I prefer to double check that this is still accurate. If I have to declare this in my self assessment tax return, where should I enter that information since it's not a salary neither an investment income. Thank you.
Posted Wed, 07 Jun 2023 10:20:10 GMT by HMRC Admin 19

You would not declare the refund. However, you would need to adjust any Foreign Tax Credit Relief you have or are claiming to account for the reduction in foreign tax paid.

Thank you.
Posted Fri, 16 Jun 2023 21:23:19 GMT by Caroline
Hi again, You said "you would need to adjust any Foreign Tax Credit Relief you have or are claiming to account for the reduction in foreign tax paid". Am I right to believe that this "adjustment" is done by taking into consideration the amount of tax credit allowed under the terms of the DTA (and not by the actual tax refund that I got)? I'm referring to your Foreign Notes here (SA106 Notes 2022, Page FN 6, under column C). The reason why I got a tax refund is not because too much tax was withheld from my salary throughout the year, but because Canada refunded me part of my international postgraduate fees, moving expenses and medical fees. Based on my understanding, I think that the Foreign Notes mean that the DTA already takes into consideration tax credit in its framework and then, when we enter the figure in HRMC system, it means that the "system" is able to reduce the right amount of tax credits from the foreign tax actualy withheld. I hope my explanation is clear, because it's really challenging to clearly explain tax details when you aren't an accountant! Thank you.
Posted Wed, 21 Jun 2023 08:15:33 GMT by HMRC Admin 5

When claiming Foreign Tax Credit Relief (FTCR), the tax credit allowable in the UK is the lower of :                                                      
(a) the foreign tax paid (or as allowed in the relevant article of the Double Taxation Agreement) on the income or capital gain                   (
b) the UK tax liability on the income or capital gain.                                  
If part (or all )of the foreign tax on which you have claimed FTCR is subsequently refunded by the foreign tax authority, you must reduce the amount of FTCR claimed (by amending your self assessment tax return).                     
Please see Relief for Foreign Tax Paid 2021 (HS263)        

Thank you           

You must be signed in to post in this forum.